STATEMENT OF CORPORATE GOVERNANCE PRACTICES

We believe that good corporate governance is essential to creating long-term value for our unitholders. Sustained financial success can only be achieved by operating with integrity and in an ethical manner. As such, Enerplus is committed to following corporate governance best practices.

The Board of Directors of EnerMark Inc. ("EnerMark"), a wholly-owned subsidiary of the Fund, is responsible for the overall governance of the Fund and is further supported by a number of Board committees, including an Audit and Risk Management Committee, a Corporate Governance, Nominating and Environment Health and Safety Committee, a Compensation and Human Resources Committee and a Reserves Committee.

The Board of Directors

Currently, our Board is comprised of nine directors. At our Annual General and Special Meeting, scheduled for April 12, 2005, unitholders will be asked to set the number of directors standing for nomination at eight, reflecting the decision of Mr. Eric Tremblay, an executive with Enerplus, not to stand for re-election to the Board of Directors. Upon election of the Board of Directors by unitholders, seven of the eight directors will be deemed to be "unrelated or independent" pursuant to both the Toronto Stock Exchange ("TSX") guidelines and the New York Stock Exchange ("NYSE") listing standards.   Throughout our disclosure of corporate governance practices, we will use the term "independent" to denote both independent and unrelated.

The Board is charged with the overall stewardship of the Fund and manages or supervises the business of the Fund and its management.   Specifically, the Board's responsibilities include:

•  reviewing, adopting and monitoring our strategic planning process;

•  approving our goals and objectives;

•  reviewing and approving our operating budget;

•  ensuring policies and processes are in place for the identification of principal business risks and reviewing and approving risk management strategies;

•  approving corporate policies and other corporate protocols and controls;

•  succession planning, including nominating and monitoring the Chief Executive Officer and senior management;

•  approving our policy on public disclosure; and

•  ensuring the integrity of internal financial controls and reviewing management information   systems.

In addition, the Board has the responsibility at all times to act in the best interest of the Fund and our unitholders.

The Board meets a minimum of six times per year.   Each scheduled board meeting is followed by an in camera discussion of the independent directors without the presence of management.   Directors assist in preparing the agenda for Board and committee meetings and receive a comprehensive package of information in advance of each meeting.   Further, the Board attends an annual strategic planning session to review, amend or adopt long-term strategies and new corporate objectives for the upcoming year.

Board Initiatives to Improve Corporate Governance

The current corporate structures, policies and practices of the Board (including having a majority of independent directors and an independent chair) and its committees (all the Board committee's members are independent directors) has enabled the Board to conclude that Enerplus is in full compliance with the Guidelines of Corporate Governance established by the TSX. This is more fully outlined in our Information Circular and Proxy Statement for the 2005 Annual General and Special Meeting.

The Board continually reviews its practices and procedures and monitors the evolution of corporate governance practices in both Canada and the United States.

During 2004, the Board undertook a number of initiatives to improve its corporate governance practices:

•  the committees of the Board undertook a general review and, where necessary, revised each of the committees' charters to ensure compliance with all of the requirements of the TSX, the NYSE and the relevant
securities administrators.

•  a Director Unit Plan was implemented to replace the directors' participation in the Fund's Trust Unit Rights Incentive Plan.   In addition, the Board established a policy whereby each of the members of the Board must hold a minimum number of trust units within three years of their appointment to the Board.

•  pursuant to our Code of Business Conduct (the "Code) all directors, employees and consultants of EnerMark confirmed their compliance with the Code and identified any potential conflicts of interests.

•  our Whistleblower Policy was amended to enhance the confidential, anonymous reporting by employees of any concerns or complaints regarding accounting and auditing matters.

The Board discharges its responsibilities either acting in its entirety, or through one of its Board committees.   Below is a general review of each Board Committee and their respective functions:

Corporate Governance, Nominating and Environment, Health & Safety Committee

This Committee is currently comprised of two independent directors: Robert Zorich (Chairman of the Committee), and Edwin Dodge. They are appointed annually following our annual general meeting.   The purpose of this
Committee includes:

Corporate Governance and Nominating

•  assessing and making recommendations to the Board as to the size,   appropriate skills and characteristics required of Board members;

•  recommending nominees for election or re-election to the Board;

•  conducting an annual self evaluation process of the Board and each of the directors;

•  conducting an annual evaluation process to assess the effectiveness of the President & Chief Executive Officer;

•  reviewing and monitoring the orientation of new directors;

•  regularly reviewing our corporate governance practices and recommending to the Board any changes that the Committee deems necessary or advisable; and

•  reviewing our annual disclosure of corporate governance practices.

Environment, Health & Safety

•  reviewing our environment, health and safety ("EH&S") programs and policies;

•  reviewing management's performance related to EH&S matters;

•  reviewing significant external and internal EH&S reports on risk assessments, ongoing investigations and
  audits performed;

•  reviewing the status of significant remediation projects, developments and the environmental provisions;

•  ensuring that long range preventive programs are in place to limit future risks;

•  participating in annual visits to one of our operating facilities;

•  receiving an annual compliance certificate from the Chief Operating Officer; and

•  generally ensuring the integrity of our EH&S programs and policies.

Compensation and Human Resources Committee

This Committee is currently comprised of three independent directors: Douglas Martin (Chairman of the Committee), Edwin Dodge and Robert Normand. All are appointed annually following our annual general meeting.

The purpose of this Committee is to assist the Board in fulfilling its duties regarding human resources, compensation matters and succession planning. The Committee's responsibilities include:

•  assessing the performance of the Chief Executive Officer and senior management, with reference to
corporate objectives;

•  recommending executive compensation policies, programs and awards to the Board;

•  reviewing and approving the granting of trust unit rights to officers and employees under the Trust Unit Rights Incentive Program, entitlements under the Full Value Unit Plan and the Restricted Unit Long Term
Incentive Plan;

•  reviewing overall compensation programs to ensure competitiveness and employee retention; and

•  reviewing long-term succession plans for senior executive positions.

Audit and Risk Management Committee

The Audit and Risk Management Committee is currently comprised of three independent directors: Robert Normand (Chairman of the Committee), Glen Roane and Harry Wheeler. All are financially literate and are appointed annually following our annual general meeting. Mr. Robert Normand is a Chartered Accountant and has been identified as the Committee's "Financial Expert" pursuant to applicable U.S. reporting rules.   The Committee is primarily responsible for the quality of our financial reporting and operates pursuant to a charter that identifies its objectives and responsibilities.  

The Committee's responsibilities include:

•  reviewing, with management and the external auditors, the integrity of the interim and annual financial statements as well as management's discussion and analysis of financial condition and results of operations to be recommended for approval by the Board;

•  ensuring the Chief Executive Officer and the Chief Financial Officer certify the accuracy of the information set forth in the consolidated annual financial statements, the unaudited interim financial statements and related disclosure materials;

•  reviewing with the external auditors the use by management of Canadian generally accepted accounting principles, their consistent application, their appropriateness and their reconciliation with U.S. generally accepted accounting principles;

•  determining whether any restrictions affect the ability of the external auditor in reporting on our financial condition and operations;

•  engaging our external auditors and assessing their performance annually;

•  reviewing and approving the annual audit plan and fees;

•  reviewing and pre-approving non-audit services;

•  reviewing financial reporting systems and monitoring management's initiatives with regard to internal controls;

•  reviewing the Management Disclosure and Oversight Committee's report to ensure compliance with U.S. and Canadian disclosure requirements;

•  reviewing the processes by which management identifies, measures and manages the various financial risks of the business and the proper disclosure respecting same;

•  reviewing the hedging and derivatives transactions entered into by management to ensure compliance with our policy; and

•  holding regular meetings independent of management with the external auditors.

The charter of the Audit and Risk Management Committee can be found, in its entirety, on our website at www.enerplus.com .

The Committee has implemented a policy to encourage employees and consultants to disclose any perceived acts or circumstances of financial or ethical misconduct which may impact our assets or the interests of our unitholders. We have always been dedicated to the principles of honesty and integrity in all matters concerning the conduct of our business and expect and believe that all employees and contract personnel share this commitment.   As a result of this policy, any improprieties detected in the organization can be anonymously and directly reported to, among others, the Chairman of the Committee, on a confidential basis.   Further, any person providing a report pursuant to this initiative shall be protected from any form of retaliation by any of our personnel.

Reserves Committee

The Reserves Committee is comprised of three independent directors: Harry Wheeler (Chairman of the Committee), Glen Roane and Donald West. All are appointed annually following our annual general meeting.   The Committee's responsibilities include:

•  assessing the work of the independent reserves evaluator annually;

•  recommending to the Board the engagement of the independent reserves evaluator;

•  reviewing our procedures relating to the disclosure of information with respect to our reserves;

•  reviewing the scope of the annual review of the reserves by the independent reserves evaluator, including findings and any disagreements with management;

•  meeting independent of management with the reserves evaluator;

•  determining whether any restrictions affect the ability of the reserves evaluator in reporting on our reserves data;

•  receiving, annually, a signed reserves evaluator's report and a certificate of compliance/due diligence from management; and

•  approving the year-end reserves evaluation.

Management Disclosure and Oversight Committee

In addition to the Board committees, management has formed an internal committee to enhance and ensure that we meet our increasing disclosure obligations.   As a foreign private issuer listed on the NYSE, we abide by applicable U.S. law and regulations and generally follow the recommendations of the Securities and Exchange Commission ("SEC") and the NYSE. The Committee reports to senior management, including the Chief Executive Officer and the Chief Financial Officer and also serves as the coordinating group for our public disclosure.   The Committee's responsibilities include:

•  reviewing our internal, financial and disclosure controls and ensuring such controls are sufficient to discharge our legal and regulatory obligations;

•  ensuring that our internal, financial and disclosure controls are being observed by employees and are designed and operating effectively;

•  reviewing all periodic reports and disclosure documents; and

•  reviewing press releases with respect to quarterly and annual financial results.

In addition, senior executives review all public presentation materials prior to dissemination.

We believe our approach to corporate governance observes the best practices.   Further, we are in compliance with TSX Guidelines for Improved Corporate Governance in Canada.   In this regard, we direct the reader to our Information Circular and Proxy Statement for our 2005 Annual General and Special Meeting under the heading of "Statement of Corporate Governance Practices".  

As a foreign private issuer listed on the NYSE, we are required, pursuant to Section 303A.11 of the NYSE Listing Manual, to compare our corporate governance practices to the new NYSE corporate governance listing standards. We have undertaken a review of these listing standards and confirm that our practices in corporate governance are not significantly nor materially different from these standards. As a foreign private issuer, we are not obligated to and we do not have an internal audit function.

As a foreign private issuer, we are also subject to certain reporting, disclosure and certification obligations in the United States.   We have complied with and will continue to comply with all of these obligations including all required certifications by our Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act, the New York Stock Exchange, the Toronto Stock Exchange as well as Canadian securities laws.

ENVIRONMENT, HEALTH AND SAFETY

Enerplus maintains a fully integrated Environment, Health and Safety Management System that assists us in protecting the health and safety of our employees, contractors and the public, as well as helping to preserve the quality of our environment. We believe our efforts in this area are essential to our continued success and important to all of our stakeholders.

We achieved a Certificate of Recognition (COR) in the Partnership Program with Alberta Human Resources and the Workers' Compensation Board for the first time in 2000.   We have maintained this certificate through an annual review and a rigorous audit every three years thereafter.   Our last rigorous audit was successfully completed in 2003.   We are proud of this accomplishment given our continuous growth.

Enerplus continues to be an active Platinum Level participant (the highest level attainable) in the Environment, Health and Safety Stewardship Program initiated by CAPP (the Canadian Association of Petroleum Producers). We monitor key benchmarks of recordable and lost time injuries for employees and contractors. We consistently outperform the employee total recordable injury frequency as measured against CAPP's benchmark data. Unfortunately, the month of December brought a disappointing close to 2004 as we experienced two lost time employee incidents - the first since 1998.   We are pleased to report that both employees have since returned to work.

Increased focus on contractor safety during 2004 resulted in excellent progress in reducing contractor injury frequency rates. Contractor total recordable frequency rates dropped from 3.64 in 2003 to 1.64 for 2004. Our organization is committed to safety as a high priority not only for full-time employees but everyone working for Enerplus, we continue to work towards our ultimate goal of zero injuries in the workplace.

In support of the environment, health and safety, we maintain an active well abandonment and site restoration program and a comprehensive integrity management program for our surface piping, facilities, storage tanks and underground pipelines.   We apply these programs to our existing assets and any new assets we may acquire through a detailed due diligence review as part of the acquisition process. As part of our ongoing mitigation program in 2004, integrity inspections were conducted on 1,430 (31%) of our pressure vessels and 325 (19%) of our storage tanks. In addition, over 95% of our entire 5,500 kms of pipeline network is risk assessed and flow modeled annually. Overall in 2004, we spent $6 million on our corrosion mitigation program, $4.6 million on site abandonment and restoration, and $2.7 million on other related EHS activities on our operated properties.

Enerplus Employee Injury Frequency vs. CAPP

Enerplus Contractor Injury Frequency vs. CAPP

Community Involvement

Enerplus is committed to supporting Calgary and the communities throughout western Canada where our employees live and work. We provide support through contributions to specific charities, fundraising campaigns and local organizations. Our focus is on five areas of giving that we believe are a reflection of the values and needs of our employees and their families.

•  Health/Research/Wellness. We donate to causes that further medical research and well-being because it's an area that has an impact, directly or indirectly, on all individuals.   

•  Education. With more than 500 employees across western Canada, Enerplus is motivated to help individuals pursue careers in the petroleum industry. Enerplus will be around for a long time to come, and we believe an investment in education is an investment in the future of the industry.

•  Environment and Safety.   Enerplus places a high priority on protecting the environment and on the health and safety of our employees, contractors and the public. A commitment to causes that further these concerns means a better, healthier place for all of us to live and work.

•  Volunteerism. Enerplus provides paid time for employee volunteer activities, not only for organizations we support at a corporate level, but also for those our employees choose for personal reasons. We want to support the interests and concerns of our employees.

•  Community Involvement. Enerplus provides support to community programs to help those less fortunate. It's a way for Enerplus to have a positive impact on residents of the cities, towns and regions where we
have operations.

In 2004, Enerplus expanded on some old commitments and embarked on some new ones.  

Enerplus has been a proud supporter of Habitat for Humanity since 2002. In 2004, we expanded this commitment, partnering with Blake, Cassels & Graydon LLP, CIBC World Markets Inc. and Nexen Inc. to build two townhomes for a Habitat for Humanity multi-home project in Calgary. Over six days in August and September, more than 100 Enerplus employees donated their time, energy and carpentry skills to make a difference in the lives of two Calgary families, and in the process, building the team camaraderie and further fostering the community spirit that
Enerplus embodies.  

Enerplus continued its commitment to the Alberta Children's Hospital, making the third of five payments dedicated to building the new hospital. When this commitment is fulfilled in 2006, Enerplus will have donated a total of $100,000 over five years. Hospital construction is on track and is expected to open in the summer of 2006. In 2004, we also initiated an additional five-year $100,000 pledge to STARS Air Ambulance. STARS provides emergency medical transport for the critically ill and injured throughout Alberta and into British Columbia, particularly important to Enerplus given our diversified field operations.  

Continuing a long-term affiliation, the efforts of our employees and corporate matching allowed us to donate more than $300,000 to the Calgary and area United Way in 2004. We also provided ongoing support to cancer research, donating nearly $30,000 in 2004 to the Tom Baker Cancer Centre and other cancer projects in Alberta.

To support Alberta's youth in building careers in the petroleum industry, Enerplus has established a total of five scholarships at the University of Calgary ("U of C") and the Southern Alberta Institute of Technology ("SAIT").   At U of C, two scholarships are available annually to undergraduate students in the Faculty of Engineering in Oil and Gas Engineering and the Faculty of Science in Geology and Geophysics. At SAIT, Enerplus funded one award in each of the following programs: Applied Petroleum Engineering Technology, Computer Technology and Petroleum Engineering Technology.   The awards are based on academic merit and financial need.

In 2005 we will continue with our commitments and assist other worthwhile causes where we can.   Early this year we responded to the devastation in southeast Asia by matching employee donations directed to the tsunami relief efforts.   The generosity of our employees resulted in a $15,000 donation to UNICEF.

Enerplus is proud to be a responsible corporate citizen, contributing to the quality of life in the communities where we have operations.

Enerplus employees along with our partners, helped build two townhomes for Habitat for Humanity Calgary.